The capital strike against Alberta’s New Democratic Party government began the morning after the May 5 election. I know this because a private oil company on whose board an acquaintance sits cancelled plans that morning to go public. Several hundred millions of dollars that would have been transferred from investors to Alberta’s oil and gas fields, keeping hundreds employed, instead stayed put. That’s the damage from a single example.

Human nature seems to contain a deep-rooted need to hope for the best following ominous events. That’s combined with our politically correct era’s habit of speaking in euphemisms, in which adversaries become “partners” and groups talk about “working with” the overlords who are dictating their future. Alberta, the formerly exceptional province that spurned left-wing government for almost 100 years, has been no exception in this regard.

Following the election, business and energy industry groups expressed optimism that the new premier, Rachel Notley, would listen to reason and deliver the “certainty” that business groups always seem to think politicians actually want to provide. Surely, with a reeling economy and low commodity prices, Notley and her party wouldn’t strangle the industry that keeps Alberta and its public finances going.

Why would people think that? Why would an ideological, moralistic, utopian movement act counter to the interests of the people who elected them, even counter to their own future electoral interests? Socialists – or, if you insist, social democrats – the world over have contempt for economic facts. They simply don’t believe that if you raise corporate taxes, businesses won’t work as hard to be profitable and some businesses won’t be launched at all. They don’t grasp that a high royalty rate on an oil well that nobody drills because royalty rates are too high delivers precisely nothing to the provincial treasury. Former premier Ed Stelmach, an alleged conservative, never understood this. So why would an urban lefty who has never had to make the payroll of so much as a lemonade stand?

A warning: Alberta’s NDP will prove just as venal and deceitful as their Progressive Conservative predecessors, and far more damaging. For, instead of the inert cluelessness and mindless spending of the PCs, the NDP will be a wrecking crew.

The NDP have already announced spending that the deficit-ridden treasury can’t afford, higher corporate taxes, higher carbon taxes on large emitters, an investment-killing review of energy royalties and yet another regulatory overhaul. When the expected revenue windfall fails to pour in, higher personal taxes, an economy-wide carbon tax and a sales tax are likely to follow. Investment will plunge further, and tens of thousands of further unemployed will join the estimated 100,000 who lost their jobs due to low commodity prices.

Things are going to get a lot worse in Alberta. And, because Alberta’s investment-driven economy accounted for tens of billions of dollars in manufacturing activity in eastern Canada, the damage will extend nationwide.

More of Koch’s writing can be found at www.drjandmrk.com.

© 2015 Investment Executive. All rights reserved.